Euro rises against dollar despite weak

The euro climbed against the dollar on Tuesday as investors shrugged off news of slumping German investor confidence and looked ahead to a key speech by US Federal Reserve Chairman Ben Bernanke. Gold scored a fresh record high as it shot above $1,900 an ounce for the first time, with traders snapping up the safe-haven precious metal on concerns over high debt levels in the eurozone and United States. In London, the euro rose to $1.4452, from $1.4356 late in New York on Monday. The dollar eased to 76.63 yen from 76.78 yen after striking a record low at 75.95 yen last Friday. German investor confidence slumped in August for a sixth month running to levels last seen in late 2008 on worries about the eurozone debt crisis and weak prospects for economic growth, the ZEW indicator showed on Tuesday. The closely watched ZEW economic expectations index fell a whopping 22.5 points to stand at minus 37.6 points, far below the indicator’s historical average of 26.2 points. In July, it had slipped by just 6.1 points. The drop to a level last seen in December 2008 was worse than expected, with economists polled by Dow Jones Newswires predicting on average a fall to minus 26 points. "Euro/dollar continues to trade in its broad range," said CMC Markets analyst Michael Hewson. "Given the problems in Europe I'm surprised it's as resilient as it is -- which probably says more about the United States than Europe." Traders set aside the ZEW news ahead of Bernanke's speech on Friday, amid speculation the central bank chief may at Jackson Hole outline fresh steps to stimulate the ailing US economy. Analysts expect Bernanke to give an unspecific pledge to offer more measures if needed, but he is seen as unlikely to announce another round of quantitative easing, or the printing of new money aimed at boosting the economy. Neil MacKinnon, an economist at VTB Capital, said the dollar was "not helped by the 'double dip' recession risk and (Fed) pledge to keep rates low until mid 2013." The Federal Reserve's Federal Open Market Committee has pledged to hold interest rates near zero for two more years to counter a US economy which faces increased risks of stalling. Elsewhere, gold prices rocketed in Asian trading hours to a fresh record high at $1,913.50 an ounce, before pulling back in London. "It's no surprise to me that gold continues to rise given the fiscal backdrop in Europe and the US and I think it will likely gain further as Europe continues to unravel," said analyst Hewson. The greenback meanwhile eased against the yen as Tokyo continued efforts to halt the rise of the Japanese unit with the threat of intervention, after Finance Minister Yoshihiko Noda upped his rhetoric on Monday. On Tuesday in London, the euro changed hands at $1.4452 against $1.4356 late in New York on Monday, at 110.75 yen (110.25), £0.8731 (0.8718) and 1.1378 Swiss francs (1.1342). The dollar stood at 76.63 yen (76.78) and 0.7867 Swiss francs (0.7900). The pound was at $1.6563 (1.6464). On the London Bullion Market, gold prices rose to $1,881.32 an ounce from $1,877.50 on Monday.